Asia stocks up after Greece deal; Yellen boosts dollar
HONG KONG–Asian markets rose Thursday as Greek MPs voted in favor of an austerity-laden bailout package, while the dollar extended gains after Federal Reserve chief Janet Yellen reaffirmed a US interest rate hike by yearend.
Volatility returned to Shanghai and Hong Kong as better-than-expected growth data reduced the chances of fresh economy-boosting measures from Beijing, while there were fears a recent rout in mainland markets could resume.
Tokyo gained 0.67 percent, or 136.79 points, to 20,600.12 with the weaker yen also providing support. Seoul added 0.72 percent, or 14.98 points, to 2,087.89 and Sydney gained 0.59 percent, or 33.4 points, to close at 5,669.6.
Shanghai ended 0.46 percent higher, adding 17.47 points to 3,823.18 while Hong Kong closed up 0.43 percent, or 107.02 points, to 25,162.78.
The two markets swung throughout the day, having both opened sharply lower in the first few minutes.
Against a backdrop of violence outside parliament, lawmakers in Athens early Thursday voted in favor of the unpopular proposals–including reforming taxes, pensions and labor rules–putting it on the path to a eurozone rescue.
However, while Prime Minister Alexis Tsipras won the day, he suffered a major mutiny in his own party.
Now the agreement must go before the domestic parliaments of some of the other 19 members of the eurozone, with all eyes in particular on EU powerhouse Germany, which is set to vote on Friday.
Only after that can the tough talks to finalize the long-awaited deal, expected to take much of the summer, begin in earnest.
The news pushed the euro higher in early Asian trade, rising to $1.0963 from $1.0947 in New York and 135.88 yen from 135.51 yen. However, it retreated to $1.0904 and 135.22 yen in the afternoon.
The dollar also firmed to 123.92 yen from 123.79 yen.
The greenback was boosted by Yellen’s comments indicating a US rate hike is just around the corner.
US rate rise nears
In testimony to Congress, Yellen stuck to the position of the Fed policy meeting that a hike would come “at some point this year” if “the economy evolves as we expect.”
Her comments came as the Fed’s closely watched Beige Book showed the world’s No. 1 economy grew in May and June, with all 12 of the bank’s districts enjoying expansion.
Most analysts predict a rate rise from record lows either in September or December.
The Dow ended marginally lower, the S&P 500 lost 0.07 percent and the Nasdaq shed 0.12 percent.
“Macro themes will not and cannot be removed from the headlines,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., wrote in an e-mail to clients.
“The fact the gray clouds that are China and Greece have cleared slightly only brings a sharper focus on the biggest macro cloud of 2015–Fed lift off,” he said, according to Bloomberg News.
In Shanghai, shares moved in and out of positive territory, with Wednesday’s gross domestic product report unable to settle investors after a month-long plunge wiped 30 percent off the composite index, amounting to trillions of dollars in valuations. It had surged more than 150 percent in the year leading up to its June 12 peak.
The sell-off came to an end last week after the government unveiled a series of strict rules to avert a crash.
“A lot of domestic investors are still in a gambling mode,” said Yen Chiu, a Hong Kong-based trader at Shenwan Hongyuan Group Co.
“That’s how the market is very volatile. We are quite conservative at the moment and the shrinking volume confirms trading is becoming more cautious overall.”
Oil prices were mixed after sinking Wednesday on fears about the impact of more Iranian crude hitting markets after its landmark nuclear deal.
US benchmark West Texas Intermediate for August delivery rose 13 cents to $51.54 a barrel after tumbling $1.63 Wednesday. Brent eased five cents to $57.00. The contract, which expires Thursday, had fallen $1.65 the previous day.
Gold fetched $1,144.42 compared with $1,154.88 late Wednesday.
In other markets:
— Mumbai rose 0.88 percent, or 247.83 points, to end at 28,446.12.
Axis Bank rose 4.14 percent to end at 608.75 rupees, while miner Vedanta Limited fell 1.17 percent to 143.70 rupees.
— Malaysia’s key index lost 0.03 percent, or 0.53 points, to 1,726.73.
Tenaga Nasional dropped 2.37 percent to 12.36 ringgit, Sime Darby fell 0.12 percent to 8.59 while Genting Malaysia gained 0.71 percent to 4.23 ringgit.
— Bangkok slipped 0.37 percent, or 5.48 points, to 1,481.26.
Coal producer Banpu fell 2.91 percent to 25 baht, while Airports of Thailand dropped 2.30 percent to 297 baht.
— Singapore rose 0.44 percent, or 14.59 points, to close at 3,353.45.
OCBC Bank gained 1.3 percent to end at Sg$10.33 and Singapore Telecom advanced 0.70 percent to finish at Sg$4.32.
— Taipei ended 0.13 percent lower, dipping 11.99 points to 9,042.21.
Taiwan Semiconductor Manufacturing Co. fell 1.44 percent to Tw$136.5 while Hon Hai Precision Industry was 0.30 percent lower at Tw$96.0.
— Wellington rose 0.31 percent, or 17.75 points, to 5,824.16.
Contact Energy was up 1.78 percent at NZ$5.15 and Chorus lifted 0.89 percent to NZ$2.825.
— Manila closed 0.77 percent, or 58.09 points, up at 7,617.13.
SM Prime Holdings added 2.44 percent to 21 pesos, Philippine Long Distance Telephone gained 2.59 percent to 2,936 pesos and Ayala land was unchanged at 38.30 pesos.
— Jakarta was closed for a public holiday.
